Louisiana Estate Planning and Elder Law

Building an Estate Plan after a Second Marriage

2009-09-29T06:41:38-05:00

Getting remarried is a happy occasion, but it also makes estate planning more complex. Elder Law Prof Blog guest blogger, Hannah Watson, suggests some considerations for your new estate plan, summarized here:

Discuss your plan with your family. Don't allow children from a previous marriage to be surprised by changes in your plan.
Talk to your new spouse. Discuss the important issues that will need to be ironed out with your new partner so that he or she can live comfortably should something happen to you.
Establish goals with your new spouse. You may want to give assets to charity instead of adult children.
Consider a trust. While not appropriate for some families, a trust may be a fair way to split assets in blended families.
Speak to an estate planning attorney. Planning for your assets when blended families is complicated.

Read Hannah's article here.

Who Can Serve as Executor

2009-09-22T06:46:02-05:00

If you take the time to draft a will you can choose your own executor. An executor, or personal representative, is the person chosen to supervise the administration of your estate after your death. First, you must decide if you want an individual or an institution to act as your executor. An institution can be a bank, a trust company, etc. Most people select an individual. Next, you should verify that your choice of executor will be allowed to serve. Some states have qualifications that an individual must meet in order to serve in this capacity. For example, in Louisiana an individual executor must be:

Over 18 years of age
Not mentally incompetent
Not a convicted felon
A resident of Louisiana unless that person has appointed a resident agent
Not unfit due to bad moral character

If you die without making a will or the executor you named cannot fulfill that duty, the court will choose an executor. State law regulates who has priority to serve. First priority is usually given to the surviving spouse and children are next in line. In the absence of spouse or children, other members of the family may be selected, but the court will decide if heirs cannot agree.

For tips on choosing an executor, click here.

What does the executor do? Click here.

Source for portions of this post: Elder Law Answers

It's Never Too Late. Or, is it?

2009-08-18T11:00:23-05:00

It's never too late. Better late than never. Adages we run into everyday. But sometimes it is too late when dealing with estate planning documents.

Here are two stories from my files (not real names):

The Jordans created a revocable living trust and made wills that gave all of their assets to the trust. Later, they revoked the trust because they never used it properly and it was too complicated to manage. But, then Mr. Jordan became mentally incapable of revising his will. So his will which gave all of his assets to the trust is largely invalid. It was too late for him to revise the will to correspond to changed circumstances.
Sally, a single elderly lady refused to give her power of attorney to one of her adult children. Now, she is in failing health and has impaired mental abilities. She lacks the capacity to give her power of attorney to anyone. She's going to need a court appointed guardian to manage her affairs.

When a person drafts estate planning documents such as a will or power of attorney, they must have the mental capacity to convey their wishes to an attorney and understand the documents being prepared. There does come a point when it is too late - when the client no longer has the mental capacity to understand the documents.

Lesson:Don't wait. Do your planning now while you are feeling good.

Healthcare Proxy and POA for Your Adult Children

2009-08-12T17:53:33-05:00

I am re-posting this since it is important this time of year when many parents are sending children to college.

Your college-aged children should have a health care proxy and durable power of attorney in place. Even though you consider them as your children, your kids over age 18 are considered adults by law. As such, they are entitled to medical and financial independence and privacy. Without a health care proxy, the hospital is not allowed to discuss their medical issues with you. Likewise, a bank will not allow you access to your child's bank account without a durable power of attorney.
While your child is home for summer break, consider signing a health care proxy and durable power of attorney. Then make sure copies of the health care proxy get to your child’s college health clinic and primary care physician. You might consider putting a copy in the glove-compartment of his or her car and giving a copy to a roommate or close friend.

How Much Does a Will Cost?

2009-08-06T09:10:01-05:00

I have to share this post by Danielle G. Van Ess from her blog, Massachusetts Wills, Trusts and Estates. Danielle makes some excellent points about wills downloaded from the internet and the process of estate planning. It's more about a relationship than a document. Please read her post here.

Then, ask yourself the real question: How much does it cost your family if you don't prepare with a comprehensive estate plan, including a well-drafted will tailored to your situation?

Trustee Duties 101

2009-08-04T10:34:47-05:00

A trust is an arrangement in which a person or institution (trustee) holds legal title to assets for the benefit of another person (beneficiary). If you are asked to be the trustee of a trust, it's not only a great compliment in regard to your character and judgment, but also a huge responsibility. The following are some general trustee duties. The trust document may add to these duties. You must follow the trust document very carefully.

Fiduciary Responsibility. A trustee serves in a “fiduciary” role with respect to the beneficiaries of the trust. This means that someone has placed a lot of faith in you and you are required to act in the best interest of the beneficiary even if that conflicts with your own interests.
Investment Standards. You must act as a prudent investor. Consider the interests of both current and future beneficiaries before deciding on how to invest the assets of the trust.
Distributions. Consider the size of the trust and other beneficiary resources when making decisions on whether or not to make distributions to a beneficiary.
Accounting, Taxes and Record Keeping. Give an account of all income to, disbursements from and expenses by the trust on an annual basis (or as required by your state's law) to the beneficiaries. You are responsible for seeing that necessary tax returns are filed. You should keep careful records of all transactions and never commingle your personal funds with trust funds. You are usually allowed to hire accountants etc. to file tax returns or prepare an accounting.
Fees. Trustees are entitled to reasonable compensation for their services. Although family members don't usually accept compensation, it is customary for institutions that manage trusts (banks, law firms, trust companies) to charge a percentage of the funds under management.

In conclusion, serving as trustee gives you an incredible opportunity to provide a great service to the trust’s beneficiaries. The work can be very rewarding, but be mindful of the responsibilities described above to ensure that everything is in order. If you have questions about serving as trustee, feel free to contact our office for help

Source for post: Elder Law Answers

How Much Money Should be in the Special Needs Trust?

2009-08-03T13:16:31-05:00

If you are the parent or guardian of a special needs child, you want to ensure that your child will remain financially secure when you are no longer there to provide support. Your child likely has significant, ongoing expenses, and uncertain future expenses and public benefits. Determining how much a special needs trust should hold is a big challenge.

Fortunately, help is available from attorneys and financial planners with expertise in disability issues, as well as from special needs calculators, such as this online version provided by Merrill Lynch. The calculator asks a series of questions to help you plan, such as:

The beneficiary's sources of income - salary, public benefits, investment income and legal settlements

The beneficiary's expenses - housing, transportation, medical and personal expenses
The beneficiary's life expectancy
The parent or guardian's time until retirement
Expected rate of return and inflation

The calculator then comes up with an estimated lump sum needed to fund the trust.

Once you have this estimate, you'll need to decide how to generate the funds. You may need to balance the interests of your special needs child with your other children and your own. Don't forget to create or update an estate plan and determine which of your assets you’ll leave to the trust. Also, advise relatives to direct gifts and bequests to the trust, rather than the child, to avoid the risk of disqualifying the child from eligibility for public benefits.

Source for post: Special Needs Answers from the Academy of Special Needs Planners, August 2007

Technorati Tags: Estate Planning, Trusts

Writing a Memorandum of Intent for Your Special Needs Child

2009-08-03T13:15:27-05:00

Raising children is difficult in the best of circumstances. You’ve spent years learning every like and dislike of your special needs child and then it hits you – who will know this when I’m gone?

The answer is a Memorandum of Intent, which is a letter that you write to the guardian of your child. In it you can express things that might be considered too small or that change too frequently to include in your will or trust. Listed below are just a few of the items that might be included in a Memorandum of Intent:

Healthcare and therapeutic needs
Contact information for family friends, doctors, therapists, pharmacists, teachers, etc.
Insights into your child’s personality - specifically the things that are unique
Preferences for education, camp, child-rearing and religious upbringing
Food preferences and any allergies
Items or practices that might provide comfort
Item or practices to avoid
Holidays and traditions celebrated by your family

A memorandum of intent will provide for your child’s emotional well-being. It is the compilation of a level of knowledge that you would only know by spending everyday with someone you love. This thoughtful information will help ease the transition for all involved when you are no longer available to care for your child.

Source for Post: The Academy of Special Needs Planners. Read the article here.

Special Needs Trusts for Children Under 18

2009-07-20T17:17:26-05:00

Parents of children with special needs usually don’t consider creating a special needs trust until their child turns 18. But special needs trusts are versatile instruments that can do a lot more than simply protect a person’s access to government benefits. Here are some reasons not to wait:

Estate Planning. The primary reason in creating a special needs trust before a child’s 18th birthday is the same reason parents of children without special needs should have an estate plan – to provide security and stability for family members should something happen to them. If parents of a child with special needs pass away unexpectedly, an active special needs trust will allow the estate to be held for the benefit of the child with special needs in a way that offers maximum flexibility for the child.
Gifts. Parents may want to consider establishing a special needs trust for their minor child so that relatives can fund the trust with gifts. Older relatives planning to leave an inheritance for a child with special needs may give the bequest directly to the trust.
Life Insurance. Parents of a child with special needs may want to buy a life insurance policy that will help pay for their child’s care after they are deceased. Special needs trusts can hold life insurance policies and manage the proceeds from those once the parents have died.
Home Ownership. Special needs trusts can also own homes, decreasing the risks of placing property responsibility in the hands of someone who may not be able to properly maintain a home.
Care Management. Special needs trusts can provide specific care instructions as well as the arrangement of family involvement in the daily activities of a person with special needs. In addition, experienced special needs trustees can assist families looking for additional care options for their children.

Planning early and frequently updating and improving a special needs trust can be the difference between a fairly useful trust and a highly effective one. In most cases, the trust will be unfunded during the lifetime of the parents, regardless of the child’s age. But having the trust available is a valuable planning technique.

Source for Post. Academy of Special Needs Planners, Special Needs Answers.

Lost Wills and Where to Look

2009-07-15T12:40:14-05:00

I was contacted yesterday by an elderly client who was "pretty sure" she drafted a will and had a vague idea of the attorney's name. What she did remember was the name of the local banker who referred her to the lawyer. I just spoke with the banker this morning to get the lawyer's name and find the will. Just after I hung up, I read this excellent post by Leanna Hammill regarding finding a lost will. She has some great tips. Read them on her blog: Massachusetts Estate Planning and Elder Law.